Chapter ---COMPOSITION RULES
1.Intimationfor compositionlevy
(1)Anypersonwhohasbeengrantedregistrationonaprovisionalbasisundersub-rule (1) ofruleRegistration.16andwhooptstopaytaxundersection10,shallelectronicallyfileanintimationinFORMGSTCMP-01,dulysigned,ontheCommonPortal,eitherdirectlyorthroughaFacilitationCentrenotifiedbytheCommissioner,priortotheappointedday,butnotlaterthanthirtydaysafterthesaidday,orsuchfurtherperiodasmaybeextendedbytheCommissionerinthis behalf:
ProvidedthatwheretheintimationinFORMGSTCMP-01isfiledaftertheappointedday,theregistered person shallnotcollect anytaxfrom theappointed daybut shall issuebill of supplyforsupplies made after thesaid day.
(2)AnypersonwhoappliesforregistrationunderruleRegistration.1maygiveanoptiontopaytaxundersection10inPartBofFORMGSTREG-01,whichshallbeconsideredasanintimationto paytaxunder thesaid section.
(3)Anyregisteredpersonwhooptstopaytaxundersection10shallelectronicallyfileanintimationinFORMGSTCMP-02,dulysigned,ontheCommonPortal,eitherdirectlyorthroughaFacilitationCentrenotifiedbytheCommissionerpriortothecommencementofthefinancialyearforwhichtheoptiontopaytaxundertheaforesaidsectionisexercisedandshallfurnishthestatementinFORMGSTITC-3inaccordancewiththeprovisionsofsub-rule(4)ofruleITC.9within sixtydaysfrom the commencement ofthe relevant financialyear,
(4)Anypersonwhofilesanintimationundersub-rule(1)topaytaxundersection10shallfurnishthedetailsofstock,includingtheinwardsupplyofgoodsreceivedfromunregisteredpersons,heldbyhimonthedayprecedingthedatefromwhichheoptstopaytaxunderthesaidsection,electronically,inFORMGSTCMP-03,ontheCommonPortal,eitherdirectlyorthroughaFacilitationCentrenotifiedbytheCommissioner,withinsixtydaysofthedatefromwhichtheoptionforcompositionlevy isexercisedorwithinsuchfurtherperiodasmaybeextendedbytheCommissionerin this behalf.
(5)Anyintimationundersub-rule(1)orsub-rule(3)inrespectofanyplaceofbusinessinanyStateorUnionterritoryshallbedeemedtobeanintimationinrespectofallotherplacesofbusinessregistered on the same PAN.
2.Effective datefor compositionlevy
(1)Theoptiontopaytaxundersection10shallbeeffectivefromthebeginningofthefinancialyear,wheretheintimationisfiledundersub-rule(3)ofrule1andtheappointeddatewhereintimation is filedunder sub-rule(1)of thesaid rule.
(2)Theintimationundersub-rule(2)ofrule1shallbeconsideredonlyaftergrantofregistrationtotheapplicantandhisoptiontopaytaxundersection10shallbeeffectivefromthedatefixedundersub-rule (2)or(3) of ruleRegistration.3.
3.Conditions andrestrictions for compositionlevy
(1)Thepersonexercisingtheoptiontopaytaxundersection10shallcomplywiththefollowingconditions:
(a)heis neither a casual taxable person nor anon-resident taxable person;
(b)thegoodsheldinstockbyhimontheappointeddayhavenotbeenpurchasedinthecourseofinter-StatetradeorcommerceorimportedfromaplaceoutsideIndiaorreceivedfromhisbranchsituatedoutsidetheStateorfromhisagentorprincipaloutsidetheState,wheretheoptionisexercised under sub-rule (1)of rule 1;
(c)thegoodsheldinstockbyhimhavenotbeenpurchasedfromanunregisteredpersonandwherepurchased, hepaysthetaxundersub-section(4) ofsection 9;
(d)heshallpaytaxundersub-section(3)orsub-section(4)ofsection9oninwardsupplyofgoods or servicesor both receivedfromun-registeredpersons;
(e)hewasnotengagedinthemanufactureofgoodsasnotifiedunderclause(e)ofsub-section
(2)of section 10, duringtheprecedingfinancialyear;
(f)heshallmentionthewords“compositiontaxableperson,noteligibletocollecttaxonsupplies”at thetop of thebill of supplyissuedbyhim;and
(g)heshallmentionthewords“compositiontaxableperson”oneverynoticeorsignboarddisplayedataprominentplaceathisprincipalplaceofbusinessandateveryadditionalplaceorplaces of business.
(2)Theregisteredpersonpayingtaxundersection10maynotfileafreshintimationeveryyearandhemaycontinuetopaytaxunderthesaidsectionsubjecttotheprovisionsoftheActandtheserules.
4 Validity ofcompositionlevy
(1)Theoptionexercisedbyaregisteredpersontopaytaxundersection10shallremainvalidso longas hesatisfies allthe conditionsmentioned inthe saidsectionand these rules.
(2)Thepersonreferredtoinsub-rule(1)shallbeliabletopaytaxundersub-section(1)ofsection9fromthedayheceasestosatisfyanyoftheconditionsmentionedinsection10ortheserulesandshallissuetaxinvoiceforeverytaxablesupplymadethereafterandheshallalsofileanintimationforwithdrawalfromtheschemeinFORMGSTCMP-04withinsevendaysofoccurrence of suchevent.
(3)Theregistered personwhointends to withdrawfrom the compositionschemeshall,before thedateofsuchwithdrawal,fileanapplicationinFORMGSTCMP-04,duly signed,electronicallyon theCommon Portal.
(4)Wheretheproperofficerhasreasonstobelievethattheregisteredpersonwasnoteligibletopaytaxundersection10or hascontravened the provisions of the Act orthese rules,hemayissue
anoticetosuchpersoninFORMGSTCMP-05toshowcausewithinfifteendaysofthereceiptof suchnotice as to whyoption to paytaxundersection10 should not be denied.
(5)Uponreceiptofreplytotheshowcausenoticeissuedundersub-rule(4)fromtheregisteredperson inFORMGSTCMP-06, the properofficershallissue an order inFORMGST CMP-07within thirtydaysof receiptof suchreply,eitheracceptingthe reply, ordenyingthe option to paytaxundersection10fromthedateofoptionorfromthedateoftheeventconcerningsuchcontravention,as thecasemaybe.
(6)Everypersonwhohasfurnishedanintimationundersub-rule(2)orfiledanapplicationforwithdrawalundersub-rule(3)orapersoninrespectofwhomanorderofwithdrawalofoptionhasbeenpassedinFORMGSTCMP-07undersub-rule(5),mayelectronicallyfurnishattheCommonPortal,eitherdirectlyorthroughaFacilitationCentrenotifiedbytheCommissioner,astatementinFORMGSTITC-01containingdetailsofthestockofinputsandinputscontainedinsemi-finishedorfinishedgoodsheldinstockbyhimonthedateonwhichtheoptioniswithdrawnordenied,within30days,fromthedatefromwhichtheoptioniswithdrawnorfromthedateoforder passed inFORMGSTCMP-07,as the case maybe.
(7)Anyintimationfor withdrawalundersub-rule(2)or(3)ordenialoftheoptionundersub-rule
(5)inrespectofanyplaceofbusinessinanyStateorUnionterritory,shallbedeemedtobeanintimation in respect of all otherplaces of businessregistered on the samePAN.
5. Rate oftaxofthe compositionlevy
Thecategoryofregisteredpersons,eligibleforcomposition levyundersection10andtheserules,specifiedincolumn(2)oftheTablebelowshallpaytaxundersection10attheratespecifiedincolumn (3)of thesaid Table:
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